Back to top

Image: Bigstock

Toll Brothers (TOL) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Toll Brothers (TOL - Free Report) closed at $46.70 in the latest trading session, marking a -1.54% move from the prior day. This change lagged the S&P 500's daily loss of 1.48%. Meanwhile, the Dow lost 1.05%, and the Nasdaq, a tech-heavy index, lost 0.46%.

Coming into today, shares of the home builder had lost 4.22% in the past month. In that same time, the Construction sector lost 5.65%, while the S&P 500 gained 0.08%.

Wall Street will be looking for positivity from Toll Brothers as it approaches its next earnings report date. The company is expected to report EPS of $1.57, up 55.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.14 billion, up 10.73% from the prior-year quarter.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $10.02 per share and revenue of $10.34 billion. These results would represent year-over-year changes of +51.13% and +17.6%, respectively.

Investors might also notice recent changes to analyst estimates for Toll Brothers. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. Toll Brothers currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Toll Brothers is currently trading at a Forward P/E ratio of 4.73. For comparison, its industry has an average Forward P/E of 4.34, which means Toll Brothers is trading at a premium to the group.

Investors should also note that TOL has a PEG ratio of 0.31 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Home Builders industry currently had an average PEG ratio of 0.39 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 221, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Toll Brothers Inc. (TOL) - free report >>

Published in